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John Howard: 'Damaging' Dastyari should go

Former prime minister John Howard believes Labor's Sam Dastyari should be ditched from the frontbench because of damning Chinese "cash for comment" allegations.

Relying on the "true Westminster principle" that a frontbencher goes if their continued presence damages the team, Mr Howard said Senator Dastyari definitely fell into that category.

"And that was the rule in the end that I applied when people got into difficulty and I think (Senator Dastyari), on that ground, he has gone a million," he told the National Press Club in Canberra on Wednesday.

Senator Dastyari has faced intense scrutiny from the Coalition over a $1600 payment made by a company linked to the Chinese government, and two bottles of wine he was given by Chinese donors worth $700 each.

Dastyari said yesterday he addressed the issue with Opposition Leader Bill Shorten but he has not offered his resignation.

"I've been counselled very strongly by the Labor leader and I'm sorry," Senator Dastyari told reporters in Sydney.

"I'm here to fess up and say I was in the wrong and I should have paid it myself. I acted first and thought later."

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Mr Howard said Mr Dastyari's actions should not be used as precedent to curb political donations.

The former PM said limiting political donations would be an attack on freedom of political activity and expression and would ultimately result in massive increases in public funding.

"I don't believe that if a company is carrying on a lawful activity it should be prohibited from making a political donation," he said during an address to the National Press Club on Wednesday, adding that not all developers were crooks.